It took barely half an hour for Barack Obama and Mitt Romney to change the subject of their final debate from foreign to domestic policy. Responding to moderator Bob Schieffer’s question — “What is America’s role in the world?” — the candidates launched into their respective plans for rebuilding the U.S. economy. Obama talked about creating manufacturing jobs; Romney vowed to support entrepreneurs. Then they sparred over the merits of hiring more public school teachers. “Let me get back to foreign policy,” Schieffer interrupted — but the candidates ignored him, spending a couple more minutes debating whether or not Romney deserved credit for improving student test scores as governor of Massachusetts.

Voters expecting a focused discussion on matters of war and peace might have been confused by the frequent detours into domestic policy. Yet the very assumption that overseas challenges are distinct from those at home is outdated. In a global economy, every national priority, from the stability of the financial system to the safety of the food supply, is influenced by what happens beyond America’s borders. The discussion of domestic issues in the context of national security is long overdue. “Both candidates, in their own way, made the point that we need to look to ourselves to restore, repair, and replenish the foundations of American power,” says Richard Haass, president of the Council on Foreign Relations.

During the 20th century, the U.S. rise to global dominance was driven less by its military strength than by the dynamism of its economy. “The key to America’s victories in World War II and the Cold War is that we had our economy do the heavy lifting,” says Patrick Doherty, director of the Smart Strategy Initiative at the New America Foundation. “That’s always been the secret of American strategic success.”

That strategic edge has eroded, however, because of a decade of middling growth and ballooning deficits — the result of the 2008 financial crisis, huge increases in domestic spending, and the costs of two foreign wars. “The cumulative effect is a much worse, far more vulnerable position than we’ve ever had before,” says Haass, whose latest book,
Foreign Policy Begins at Home, comes out in the spring. “We’re strained in every area. When you look at our financial capital, physical capital, and human capital, all three are not where they need to be.”

That’s why the most critical national security test facing the next president isn’t terrorism, which Obama picked during the Oct. 22 debate; or Iran, as Romney said. Focus instead on the $16.2 trillion national debt, more than 33 percent of which is foreign-owned, with China alone holding $1.15 trillion. Haass cautions that the U.S. “would be constrained big time if markets suddenly move against us” and force the country to pay higher interest rates on its debt. That would precipitate “massive and indiscriminate” cuts in military spending that could compromise national security. Reaching a comprehensive, bipartisan deal on deficit-reduction is thus essential for preserving America’s strategic flexibility.

The debt issue is just one area where domestic trends will influence foreign policy. Energy is another, more positive example. As Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, noted in the Wall Street Journal on Oct. 23, U.S. oil production has increased by 25 percent since 2008, the highest rate of growth in the world. That has limited the spike in global oil prices caused by lower Iranian supply, allowing for tougher international sanctions that could slow the mullahs’ path to a nuclear bomb.

The biggest question for U.S. policymakers will be whether they can recalibrate domestic priorities fast enough to catch up to a changing world. Nowhere is the challenge more daunting than in the U.S. public education system. A Council on Foreign Relations Independent Task Force report, released in March, concluded that American schools “are not equipping the majority of students to effectively participate in an increasingly fast-paced and interdependent global society.”

The report found that only 4.5 percent of U.S. college students graduate with engineering degrees; in China, 33 percent do. Beyond hurting American economic competitiveness, the knowledge gap is affecting the ability of the U.S. to defend itself. Among eligible high school students, 30 percent score too low on the Armed Services Vocational Aptitude Battery to qualify for military service. The U.S. diplomatic and intelligence services report a shortage of applicants with the language and analytical skills needed to serve in key posts around the world. And even as Defense Secretary Leon Panetta warns that a cyber-attack “could be as destructive as the terrorist attack on 9/11,” the U.S. education system isn’t giving students the technical knowledge to deal with it. According to the CFR task force, “The United States is arguably unprepared to mount a strong defense against [a cyber-attack], partly because there are not enough people with the kind of technological expertise needed to do so.”

In that light, it’s encouraging that the presidential candidates spent so much time discussing class sizes, test scores, and teachers during the foreign policy debate. America’s role in the world will be determined by the solutions the country’s leaders come up with to the biggest domestic crises, such as education and the national debt. What those solutions will be, of course, remains very much up in the air. That’s what elections are for.

The bottom line One domestic issue affecting national security: Faltering U.S. schools mean 30 percent of potential recruits fail military entrance exams.

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